CBA Myths Vs. Facts

Gary Bettman and the NHL owners have made a “meaningful and significant” alteration to their first proposal.

Under the NHL owners’ first proposal the players’ share of Hockey Related Revenue (HRR) would fall to 43% from 57%. This is a payroll reduction of $460M, or 24%, on 2011/12 numbers. Their second proposal would reduce the player share to 46% of HRR, or “only” 19.3%.

This is the equivalent of the NHLPA making a proposal seeking 71% of HRR (mirroring the decrease in the owners’ proposal) and then making a second proposal seeking “only” 68% of HRR. Should that be treated as a “significant” and “meaningful” move in the owners’ direction worth more than $400 million?

Of course not. Nor should the owners’ proposal. The owners have made no concessions. Every part of their proposal is much more favorable to them than the current agreement. A concession is when you give up something you have, not limiting by a small amount that which you want but don’t have.

The players, on the other hand, have made real concessions in order to reach an agreement.

Gary Bettman said about a potential lockout: “Both sides have to bear responsibility. Whether it’s a strike or a lockout, it makes zero difference.”

A lockout is a very much a choice; no law compels a lockout. The owners seem intent on making that choice, and doing so and the first possible moment. They have experience in locking the players out: this will be the 3rd consecutive lockout since Bettman became NHL Commissioner.) The players have not even considered a strike.

The law allows for the season to start on time under the terms of the existing CBA so long as both sides are willing to do so. The players are willing to continue to negotiate and also continue to work until a deal is reached that is fair to both sides. The owners’, apparently are not so willing. If training camps and the 2012-13 NHL season do not start on time, it will be the owners’ decision and their decision alone.

Gary Bettman accused the players of “stonewalling” the negotiations and suggested that attempts to begin bargaining last year were rebuffed by the NHLPA.

The players are not “stonewalling”. They have simply refused to accept the owners’ outrageous demands. There was and is plenty of time to reach and agreement and begin the season without interruption.

The Players have made proposals to limit their salaries and to implement far reaching revenue sharing.

Commissioner Bettman says of revenue sharing: “It is a non-issue… a distraction.”

Meaningful revenue sharing is an essential component of any successful league. It is not a distraction; it is the heart of the issue.

After seven straight seasons of record revenue, it’s clear that if the NHL has a problem, it is not a revenue issue, but rather a revenue disparity issue. The owners’ revenue sharing proposal does increase to revenue sharing somewhat, but every dollar of revenue sharing is paid for by player salary reductions; the higher income clubs contribute nothing on their own.

The Players’ propose that they partner with the high-income teams to provide targeted funding for the distressed teams and owners. But the players won’t and shouldn’t have to do this alone. The higher income teams need to share far more with the lower revenue teams. The Players will do their part; will the owners?

The NHL maintains that the starting point for these negotiations is that the owners’ should be “paying less to the players.”

Why? When Gary Bettman and the owners cancelled the entire 2004-05 season to institute a salary cap, they also rolled-back player salaries by 24% across the board. Despite those massive concessions (billions of dollars over the life of the current CBA) and with revenues now more than $ 1 Billion per year more than before the lockout, the NHL wants to massively reduce salaries yet again.

What is the rationale? Where would the savings go? No answers have been made to these questions; simply a statement that they want to pay less. That is no surprise. Every employer in every industry wants to do that.

Moreover, since the lockout, the owners have done nothing to address the rapid escalation in non-player costs, which have risen at a far higher rate than the players’ share. To date there has been no proposal or even any stated willingness to constrain these costs, or, indeed, to limit or reduce any costs other than what goes to the players.

Players are offering real concessions, worth about $450 M over the next three years if the NHL grows at the rate it has the last several year, and perhaps nearly double that if it grows at the rate of the last two seasons. The players are willing to do their part, but are not willing to have salaries simply reduced so that they do not share in the growth of the sport. The high revenue teams need to step up to help the lower revenue clubs as well.